August 2016 I reported UK’s HM Revenue & Customs landed
rewarded our complaints about Universal Medicine’s sham UK charity with a big fat tax bill to Sound Foundation Community Care. Almost £400,000. Update August 2017: Either I misinterpreted the charity’s 2014-15 end of year accounts or UM are telling lies in official documents. According to the charity’s accounts, released in the last week or two, the charity’s VAT debt was incurred as part of the charity’s transfer from trust to an incorporated company. UM says the VAT was refunded. Strangely, in spite of me repeatedly asking the charity’s trustees to explain how a £378k VAT liability appeared on the charity’s accounts, they made no attempt to correct my mistaken interpretation. None. I’m happy to retract my statements from last year and apologize to readers for the misunderstanding. If there was one. Will we receive an explanation for the outstanding anomalies in the accounts? And we’re still left with the problem that literally anyone can register a charity in the UK and take advantage of charity laws for personal financial benefit.
Compare for yourself:
Unfortunately this is always a potential outcome when authorities don’t communicate with complainants. Complainants and members of the public are left to interpret publicly released information as best they can. I sought advice on the VAT liability and no one I approached was able to provide a better explanation. Commenter, Pranic Attack, has taken a look in the comments below.
I tweeted numerous questions to the charity’s directors and none replied. The same bunch attack anyone who questions, refuse to give reasonable responses and then whinge about their reputation problems. I understand why they didn’t reply, because if they explained the reason for the VAT liability, they would then also have to answer the many other questions about the charity’s operation raised below. For that reason, I’m leaving last year’s article as I published it below. I’ve struck out the info that appears to be incorrect. I’ve added this year’s updated information in blue.
Also, as I’ve commented below, there’s a strong possibility I was right and my complaint did result in action by HMRC. UM may have simply paid the VAT to avoid a scandal.
I would also like to reassure readers that I am not mistaken in reporting other regulatory actions taken by the UK and Australian Charity Commissions, the ATO and AHPRA. Current legal actions will enable me to exhibit the relevant documents, obtained via subpoenas and discovery (in addition to publicly available documents) in court.
The Sound Foundation Charitable Trust ended up with a VAT (value added tax) liability of £378,426 (AUD650k). HMRC and the UK Charity Commission (UKCC) don’t release findings to complainants or public. However, seeing the charity has very little meaningful income,
we can I reasonably assumed the 20% VAT applied to the use of donated funds to construct the Sound Training centre. UM tried to pass the £1.85m construction off as a premises with a charitable purpose, but HMRC has rightly found it’s operating for commercial use. Charity law is complex, however, Serge Benhayon’s upper rung of enablers have enough law and accounting qualifications between them, and one of the trustees, Michael Nicholson, is a chartered accountant. They have no excuse. The building is used nearly exclusively for the Benhayon cash raking circus commercial activities. If it’s not a scam, what is it?
See below in blue. The VAT was incurred on the sale of the premises.
According to the 2015 charity accounts published on the UKCC website, it appears the charity received a
retrospective bill between September 2014 and January 2015. The building was completed in March 2012, and the largest VAT bill between then and September 2014 was £5921.
I’d like to thank our friends in the UK who helped us achieve this outcome either way. Thank you very much!
From trust to company
We noticed in January 2015 that the Sound Foundation charitable trust suddenly and inexplicably incorporated into Sound Foundation Community Care, a company limited by guarantee.
Unfortunately, we had to wait until the 2015 accounts were published in the last couple of weeks to determine why.
An incorporated company structure, as opposed to a trust, protects the trustees from personal liability. The trust was a building fund. We have student notes and communiqués describing fundraising to construct a ‘Universal Medicine conference centre’ with treatment rooms and a swimming pool facility.
When the trustees copped the near £0.38m tax bill, it appears they’ve scrambled to avoid liability by shifting to the new company structure. I don’t know what legal position they’re in at this point. The press might be able to find out more, or we may have to wait until next year’s accounts to get the real picture.
Update: The explanation for the VAT liability and accompanying whinge in the charity’s 2016 accounts is as follows:
There is and has never been any VAT debt. The material that was cherry picked that appeared to show a VAT debt simply illustrated the processing of the transfer of legal ownership of the charity’s building from the inaugural trustees of the Sound Foundation Trust to a newly incorporated substitute trustee, the Sound Foundation Community Care. There is no debt to pay and HM Revenue and Customs confirmed there were ‘no levied penalties to pay’. The Charity Commission confirmed the same.
In response to a number of baseless complaints made by the same person, the Charities Commission, acting in accord with its regulatory responsibilities was duty bound to investigate the complaints regardless of their obviously vexatious nature. Following a thorough investigation, in the Commission’s informed assessment it concluded:
“Following analysis by Charity Commission accountants that there are no recommendations or causes of concern. The conclusion of the review will mean that if the Commission receive similar complaints from this or other complainants it is unlikely they would be assessed and escalated to a regulatory team as they would potentially be deemed vexatious. The Commission’s regulatory case has now been concluded.“
They have the hide to accuse me of cherry picking. The complaints I made in 2013 resulted in a mandatory compliance order, and the charity was made to clean up its act. That’s not ‘vexatious’ by any real world definition. The complaints I made to HMRC weren’t vexatious either. The charity’s £1.75m conference premises and commercial swimming pool facility were constructed with tax exempt donated funds, most of which were donated by Esoteric devotee, Michael Nicholson. The Benhayons hire the charity’s premises for their commercial use at massively discounted rates. It’s a shameless rort, and an insult to tax payers.
2017 Update – recent accounting fun and games
Added to the info below, Simone Benhayon still only paid £10k to hire the Creative Aquatic commercial pool facility for the year. She also wrote off £68k of ‘swimming activities’ as charitable ‘donations in kind’. What a joke. I might try that on my next tax returns. I’ll write off $100k worth of blogging every year as a donation in kind. To the public benefit. Why not? A further £20k has been written up as donated ‘services and facilities’. Six hours per week of admin by a ‘secretary’ and ‘treasurer’ for a charity that does virtually nothing, 15 hours per week cleaning a facility that’s barely used. £5000 in boiler repairs – for the commercial pool?
Serge Benhayon, the first of the sixth dimensional Hierarchy to grace us with his incarnation from the lofty Sham-ballic realms – ran three months of commercial activities at the Sound Training Centre and treatment rooms in 2015-16, turning over hundreds of thousands of pounds, and paid nil for use of the facilities. Down from £4,167 in 2014-15.
During the year Universal Medicine UK Ltd, a company in which the trustee Simone Benhayon is a director and which is run by Simone’s father, Serge Benhayon, paid the charity nil (2015:£4,167) for the use of facilities a the Sound Training Centre. (p.31 of charity accounts.)
Now that’s what I call a discount.
More creative accounting
On top of the donated admin work of a ‘secretary’ and ‘treasurer’, the charity paid unspecified ‘management’ expenses of £115k. That’s a shitload of ‘management’ for a company that does so little. Or by ‘management’ do they mean legal bills? For a VAT debt wrangle with the regulator?
A VAT repayment supplement of nearly £20k? What’s the break-down for that?
The Sound Foundation also accounted £8,257 in ‘accommodation’ as a ‘cost’ of ‘charitable activities’. Who wants to bet the ‘charity’ has written off accommodating the esoteric staff or pilgrims at the retreats and other UM events, even though UM charges them for it?
No wonder they didn’t have the guts to answer my questions.
The Sound Foundation Community Care charity is not required to publish their accounts until mid next year. However, the current overview on the UKCC website shows the liability was still outstanding in September 2015. All assets were transferred from the trust to the new structure, along with the tax debt. The current figures on that page are unhealthy. The charity is operating at a loss. The charity’s income is woeful (see below). It has a £2m (AUD3.4m) asset with expensive upkeep and barely enough cash in reserve to sustain operation,
plus a giant £0.38m debt. I don’t know enough about tax enforcement in the UK, but watch this space. Someone will have to pay. I can’t see the beneficiary of this whole rort, Serge Benhayon, fronting up with it, even though he very amply has the reserves, thanks to years of scamming. Next in line might be Michael Nicholson, who donated over £1m to the building fund in 2011 and 2012. Musician, Chris James, was the charity’s founder, but quit as a trustee soon after it was incorporated.
The remaining trustees are Dragana Brown, NHS manager and cervix whisperer, Jane Keep, retailer Stephen Anderson, and London Esoteric Breast Massager and company director of Esoteric Women’s Health Pty Ltd and All Rise Say No, Sara Williams. Trustee Simone Benhayon is company director of UM UK and All Rise Say No, on top of her swim school Creative Aquatic.
Given Benhayon’s congregation has atrophied to less than 600 and he’s already milked them as much as he can, the flock is unlikely to bail the charity out.
Again, I don’t know what this means for the charity at this stage, or the building. The Sound Training Centre is plonked on The Lighthouse B&B headquarters property (doubles as UM’s UK headquarters) outside of Frome in rural Somerset. It’s difficult to imagine there’s a demand for hire of cult branded event spaces out there. It’s a high maintenance asset on land on a 999 year lease to the Lighthouse owners, ardent UM devotees, Simon and Janet Williams.
In 2010, UM’s Way of the Livingness applied for charity status in the UK as a religion. It was denied. The Charity Commission found it was not a genuine religion and demonstrated no public benefit. Problems with the dissolution clause in the trust deed gave the Commission cause for concern the trust deed might allow the trust’s assets to be applied for non-charitable purposes.
UM then merely adopted a latent existing charity founded by Benhayon’s business associate Chris James, without disclosure to the UKCC. They extracted donations from followers on the promise the facility was for UM’s use and would be owned by the ‘student body’. UM filled the trust with donated funds and built the Sound Training Centre. Benhayon’s stepdaughter, and charity trustee, Simone, leases the pool year round for her commercial swim school. Some local Esoteric practitioners hire the treatment rooms. The conference facility is used for 3 months each year, May, June and November for Universal Medicine events, retreats, workshops and group and individual healing sessions conducted by UM leader, Serge Benhayon, his family and associates. The conference centre is barely used for the remainder of the year.
The trust’s only charitable activities were promotions of UM and associates, and a pitiful grant to a local hospital.
The UKCC commenced an investigation into the charity’s UM connections mid 2013 and issued the trust with a mandatory compliance plan in October that year over trustee conflicts of interest and issues of public benefit. (The same reasons it was denied charity status in the first place.) After that the charity shuffled papers and people. Some of the trustees quit their company directorships of commercial UM UK Ltd, and UM altered its commercial publicity to say that it just hired event space from the trust.
Even if they can find £380k, Benhayon’s congregation shouldn’t bail this out. Not after they’ve been treated so appallingly by the UM outfit, which has deceived them from the beginning, and continues to.
Donors were led to believe it was a legitimate ‘Universal Medicine Trust’. Then they were told the building would be owned by the trust for the ‘students’. They were told Universal Medicine UK was a not for profit ‘unit of service’ presenting ‘on behalf of and for the Sound Foundation a charity’…whatever that means. They were pressured to make regular cash donations, including via direct debit, and to volunteer their time and labour.
The charity now claims to have 40 volunteer staff, and since the UKCC action, Benhayon and his minders have conned the slaves into carrying out something resembling charity work to prevent the CC from shutting it down altogether. In the latest accounts the trust has had to itemize charitable activities. Only a couple of events were held at the Sound Training Centre. Peaky Blinders director, Otto Bathurst, held a meeting to talk about men’s health, for example. The rest were held offsite, consisting of volunteers doing hospital and nursing home visits, singing and whatnot, perhaps buttering up the elderly for monetary gifts and bequests.
Like the Australian charity (update for that parallel mess coming soon), the only real beneficiaries are the Benhayons, and above all Serge.
As discussed in last year’s update, Simone has been leasing her Creative Aquatic swimming facility – heated indoor pool, changing rooms, toilets etc. for £10k per annum. A knock down rate. Moreover, she’s been writing off ridiculously large ‘donations in kind’ to the charity. The charity accounts show ‘charitable swimming activities’ (truly) notched up as both income and charitable spending. Notes in the accounts claim the donations in kind take the form of ‘medical and rehabilitation swims’ and discounted lessons, pool access and memberships.
The value of all of this philanthropic swimming?
- 2013 £81,000
- 2014 £95,362
- 2015 £30,577 (6 months only)
- 2016 £68,935
Breaking this down, she’s claiming roughly £1500 worth of swimming per week, that she performs from a 15m pool barely big enough to do proper laps in, and she runs about fifteen swim lessons spread between five teachers per week. Normal price swim access is £3. A lesson is £5. An annual, normal priced membership £10. The pool is open about six hours per day broken up into sessions. Do the maths. Her business would be hard pressed to turn that over each week, yet she reckons she donates that much to the charity on top of running the swim school.
Universal Medicine UK
Simone’s stepfather, Serge, takes a full Australian entourage to the UK for 3 months annually. They take over the whole centre and run about 60 days of advertised workshops, retreats etc. Additional private and group healing sessions, classes and other activities run by his family and associates are advertised to the mailing list only. Plus merchandise sales. The 5 day retreat alone was attended by over 230 followers in 2012, at approx. £1000 per person, and images show attendance of well over 100-200 at other events.
Benhayon and that lot paid a total of £5833 for that 3 months of hire. Less than £100/day (I estimate about £75/day) to turn over hundreds of thousands of pounds, if not over a million.
For some perspective, what they pay doesn’t cover the building’s energy bill for the same period. The building’s power bill is £28k per annum. (£75/day).
According to the accounts Benhayon hired the facility through Universal Medicine UK Ltd. The charity accounts falsely state he is a company director of UM UK. He has never been. Benhayon’s turnover evidently doesn’t go through the UM UK company, so where does it go? Does he pay tax on it? Anywhere?
In short, Benhayon’s followers funded what they thought would be a legitimate charitable premises for him to deliver his sermons and healing scams, so that he pays miniscule commercial overheads for an annual turnover of hundreds of thousands of GBP that he appears to export.
To add insult to injury, he’s set up his daughter and major donor, Michael Nicholson, as trustees of a bent charity that was always wide open for regulatory action.
They’ve been hit with a giant tax bill, and they’re probably legally liable. And Serge’s name is nowhere near it. Rather, he’s building a huge new $1m+ McMansion in the hills near Lismore – enhancing his 8 figure property portfolio.
Were followers informed of the tax liability?
Have they been informed of who will pay it?
We’ll have an ear out for what happens next.
I’ll take the opportunity to remind readers that since May 2014, UM have publicly labelled us liars, falsely accusing us of false accusations and labelling me a ‘criminal’, saying I’ve broken the law by making baseless complaints to regulators. The Sound Foundation’s 2014 accounts devoted a few paragraphs to spraying Lance and I for running a ‘trolling campaign’ – referring to the complaints that resulted in regulatory action by the UKCC in 2013. They’ve persisted with those defamatory fictions for 2 years, yet, on top of the 2013 UKCC action,
Benhayon and the charity directors have known about this HMRC bill – a frank confirmation of tax evasion – for over 18 months.
We might call it a killer blow to UM’s credibility, but they had none to begin with.
Benhayon’s faith-full have invested a lot on their devotion to him, and are showing signs of expenditure fatigue. They’ve overlooked an enormous number of lies and while they’ve fired off plenty of flak they’re set to wear just as much. Question is, will they wear this as well?